More Swedish shops dropping cash for cards

Sweden has seen a decrease of around 10 percent in cash usage nationwide over the past five years, a trend that has prompted more and more shops to accept only cards at the counter.

More Swedish shops dropping cash for cards

One of the latest companies to make the move to cards only was Swedish telecom operator Telia, which recently put a complete stop to cash in its 80 shops nationwide.

The most common arguments for switching from cash to card are that using hard currency can be a threat to staff safety, can be complicated, and can prove expensive.

Another example of a cashless store is bedding manufacturing chain Kungsängen, which cut out cash at all 37 of its stores on September 30th this year.

“We want to ensure the safety of our staff,” said Robert Uggla of the company to the Metro newspaper.

Meanwhile the Riksbank, Sweden’s central bank, is in the process of preparing for the 2015 introduction of updated bank notes into the Swedish currency system.

“We don’t think cash will disappear in the foreseeable future,” explained the Riksbank’s departmental chief Christina Wejshammar to the paper.

“As long as it exists, and people want to use it, then it’s important that it’s good and safe and the bank notes need to be updated.”

However, a spokesperson for trade group Svensk Handel claimed that Swedish stores will likely switch to card before the new cash comes into play.

“We’re going to see an enormous cash deposit in the stores when the banks reduce the number of offices and service boxes get harder to access. The risks grow and many shops will choose to opt out of money handling before the shift,” Bengt Nilervall told the paper.

The manufacturing and introduction of the new bank notes will cost consumers an estimated 700 million kronor ($105 million), according to Metro.

TT/The Local/og

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Sweden’s Riksbank raises rates above zero for first time since 2014

Sweden's central bank has increased its key interest rate to 0.25 percent, marking the first time the rate has been above zero for nearly eight years.

Sweden's Riksbank raises rates above zero for first time since 2014

In a press release announcing the move, the bank said that it needed to take action to bring down the current high rate of inflation, which it predicts will average 5.5 percent in 2022, before sinking to 3.3 percent in 2023.

“Inflation has risen to the highest level since the 1990s and is going to stay high for a while. To prevent high inflation taking hold in price and wage developments, the directors have decided to raise interest rates from zero to 0.25 percent,” it said. 

The Riksbank, which is tasked by the government to keep inflation at around two percent, has been caught off-guard by the speed and duration of price rises.

Just a few months ago, in February, it said it expected inflation to be temporary, predicting there was no need to increase rates until 2024.

The last time the key inflation rate was above zero was in the autumn of 2014. 

In the press release, the bank warned that the rate would continue to increase further in the coming years. 

“The prognosis is that the interest rate will be increased in two to three further steps this year, and that it will reach a little under two percent at the end of the three-year prognosis period,” it said. 

According to the bank’s new future scenarios, its key interest rate will reach about 1.18 percent in a year, and 1.57 percent within two years. 

In a further tightening of Sweden’s monetary policy, the bank has also decided to reduce its bond purchases. 

“With this monetary policy we expect inflation rates to decline next year and from 2024 to be close to two percent,” the bank wrote. 

Annika Winsth, the chief economist of Nordea, one of Sweden’s largest banks, said the rate hike was “sensible”. 

“When you look at how inflation is right now and that the Riksbank needs to cool down the economy, it’s good that they’re taking action – the earlier the better. The risk if you wait is that you need to righten even more.” 

She said people in Sweden should be prepared for rates to rise even further. 

“You shouldn’t rule it out in the coming year. Then you’ll have a once percentage point increase which will go straight into fluctuating mortgage rates.”